BP vows to reinvest all North Sea profits back into UK

BP has committed to reinvest all its profits from its North Sea oil and gas production over the next decade back into the UK, as it sought to head off political pressure for a windfall tax to help offset energy costs for consumers.

“This decade with our current plans we expect to reinvest every pound that we make and hopefully more,” chief executive Bernard Looney told shareholders at the annual meeting in London on Thursday.

The £18bn BP expects to invest in the UK by the end of 2030 represents 15-20 per cent of total capital expenditure, up from the 10-15 per cent of spending that BP has historically deployed in the UK, Looney said.

Looney added that these spending plans were not contingent on whether the UK government introduced a windfall tax, but said that such a policy could negatively impact the UK’s pursuit of greater energy security.

“A stable and competitive fiscal environment is an important element in any investment decision-making and that is what we have here in Britain today,” he said.

“By definition, windfall taxes are unpredictable and could challenge investment in home grown energy.”

Opposition parties have stepped up their calls for the Conservative government to impose a windfall tax on leading energy companies, such as BP and Shell which have generated record quarterly profits. Chancellor Rishi Sunak said in April for the first time he would consider a one-off tax on the industry if it failed to increase investment in new energy projects. He had previously rejected the case for a levy.

BP this month reported an underlying profit of $6.2bn in the first three months of the year, the highest quarterly figure since 2008 and more than double the $2.63bn recorded a year earlier.